Tom Duffy

Similar to the broader private equity universe,

terms in the independent sponsor market continue to balance manager and investor interests.

So in our view, terms for independent sponsor deals are more clearly structured to align interest between investors and sponsors.

So for example,

Tiered carry structures and monitoring fees that are based on EBITDA are now relatively standard across deals we see in the market.

That ultimately creates stronger incentives for equity value creation compared to most private equity investments that you see.

So rather than charging a flat fee and significant carried interest for minimum performance, independent sponsors must actually grow EBITDA in return high multiples of money to generate their significant wealth.

On occasion, we see an independent sponsor try to negotiate a premium carry.

These negotiations are typically not successful and would only apply in really, truly outsized return scenarios.

So before reaching out to TIFF, I want sponsors to know that we are in this together.

We're on the same team.

Plain and simple, our end goal is to partner with high caliber investors over the long term and generate strong performance along the way.

We don't want this to be a one deal and done relationship.

Again, I mentioned this earlier in one of our other questions, but our work with independent sponsors can and often does lead to fund commitments down the line if and when a sponsor is ready for a blind pool commitment.

And it has successfully done that many times.

This opportunity set creates a great chance not only for us to find and make excellent investments, but also serves as an exceptional underwriting tool for a future potential fund partner, for an emerging manager, which is another key tenant of the TIFF investment philosophy.

This is something that's very differentiated about TIFF's approach with independent sponsors.

Another topic that's important to reiterate that many independent sponsors do already know is that we've been doing this for a long time.

Since TIFF's first direct investment alongside an independent sponsor in 2014, we've learned really many lessons over the years, and we have a lot that we can bring to the table in helping these sponsors through their lifecycle, whatever that may look like.

So that's exactly correct.